Reasonable hearing and statutory penalty ceiling under Customs law required fresh consideration after procedural unfairness and excess penalty

Penalty under Section 117 of the Customs Act, 1962 was found unsustainable where the record showed denial of a reasonable opportunity of hearing, as the adjudicating authority passed the order on the date sought to be deferred despite the request for adjournment. The court also noted that the penalty imposed exceeded the statutory ceiling under Section 117. The matter was therefore remanded for fresh consideration after granting a reasonable opportunity, including a personal hearing.

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Issues: Whether the penalty imposed under Section 117 of the Customs Act, 1962 was sustainable in view of the alleged denial of a reasonable opportunity of hearing and the statutory ceiling on penalty.

Analysis: The petitioner produced correspondence seeking adjournment of the hearing and the impugned order was passed on the requested date despite the request for a different date. The record showed that a reasonable opportunity of being heard was not afforded. The statutory limit under Section 117 was also examined, and the penalty of Rs. 5,00,000/- imposed under that provision exceeded the ceiling of Rs. 4,00,000/-.

Conclusion: The penalty order was unsustainable insofar as it imposed Rs. 5,00,000/- under Section 117 of the Customs Act, 1962, and the matter was remanded for fresh consideration after granting a reasonable opportunity, including personal hearing.

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